Will 'Moneyball' Philanthropy Work?

5/17/2013 2:47PM

One Houston couple plans to give away $4 billion–but only to projects with data to prove they'll work. Former N.J. Attorney General Anne Milgram, who now works for the Laura and John Arnold Foundation, discusses with WSJ.Money's Brad Reagan.

This transcript has been automatically generated and may not be 100% accurate.

... rooms ... when UTC couple John and I are unlikely to give wait for the all in dollars but only ... to philanthropic projects they confirmed they are what they call it a Moneyball approach to getting your discusses novel and ... the tax collector for SEO strategy is brat right in his Dagestan money magazine contributor as well and overseas former New Jersey attorney general he was hired by the philanthropist to tackle the criminal ... justice system no small task here for you can read ... a lot of time out with these these these couple tells about them and a little bit about the fundamentals of the approach to giving ... when John was of ... Enron trader and lost some hedge fund the making ... may you the most successful hedge fund in recent years serving one of ... his wife with a successful executive their own right ... and ... they just ... he retired at thirty eight and suddenly there was this money away ... and that when they started ... the kind that all the way most people ... know that when ... you get something out of one make sure their money does some good ... but then the candle above frustrated by that and and so you must be borne ... in mind into their local hospital or ... local school for the homeless shelter just to make sure their mind in ... the least alone to go ... they wanted to pursue things but that John calls and high leverage opportunities so ... things that may be overlooked for ... a variety of reasons politicians or other social services where their money ... can really have the maximum effect ... aam ... and one reason to believe that Spitzer study on right you know they they are really looking that deliver live or die ... I'm a little bit right absolutely so with the new on this that this is due to the John Barr on people this didn't mean much ... the Moneyball approach to getting of course referring to ... the book and movie about baseball where other Oakland A's the pace of change the fortunes of the team might take ... the kids that data ... how are you find that to the criminal justice system it was an enormous task to tackle ... salinity things we realize we first started looking at the criminal justice system inside Pratt said we were looking for high leverage opportunities in the areas where ... it actually made transformational change ... one thing we noticed and I noticed my own experience in the attorney general's office in Jersey that ... data is just not used in the way that we would all expect great so when the great examples of how were using it today is in disorder ... called pre-trial the front end of the criminal justice system ... but the idea there is that judges make decisions everyday better among the most important society which some people thought about people's lives which defendant should be incarcerated JAL which one should be released supervision or other community corrections and ... those decisions are overwhelmingly made naturally ... without access to any doubt that without access to who the individual offenders up ... and so that's a great example where ... we're not measuring individual risk individuals close to society ... and in doing so we're spending ... billions of dollars nationally ... thirty nine jailed nations in year nine billion dollars to our street people pre-trial ... yet we're not making decisions that that's when ... he put it sometimes a baseball team no backup shortstop that a judge will know that it's ... and I think the judges are doing great out there trying to get the best account information have but historically this outages hasn't been collected in years and it hasn't been ... what we're doing is building was just built a second generation risked all that will allow a ... judge is having a step or two you basically evaluate the Angels in front of them using objective ... data driven ... cruel justice system also help its case and that they're they're they're going all over the place ... yes there are in several different areas ... but im looking for is that it might be overlooked because it difficult for ... image in the funding and obesity in humans to help me season one but a great example ... it's ... a different approach to how they are trying to track of the city just walk to the chamber that they're feeling a little bit ... yet also if you look a lot of food studies are what scientists tell me ... is that a lot of ... very small ... or incomplete and so they ... indicate certain things ... a lot of hasn't proven out ... and a lot of this cuz it's really expensive console which it was to be on the chamber's yet come on turn ... all of their bodily functions almost twenty four seven ... it's about what are some ... time ... you have to pay the people that I would except right after you have these Soliz all over the country ... and the Arnold's met with some people who ... made a compelling case that ... if we did this week a really ... or or perhaps they'll find some answers what's really cost ... of these ... some missed a few million dollars here and there before the site for a lot of money into research said they may end up losing a few million dollars ... here and there are ... interested in how this approach is ... that some ... controversy because it goes against the typical way to philanthropy worst people like instant gratification right they don't see their name on something or you get to a shelter you can you can see the tangible benefits ... for you know how hard is it is to convince people that I get to work with you about this approach ... well we've been unlucky but I think there's there's two important points in first as to the research they're just cute questions contests is that people have an answer ... and I think they are also the first ones to really be willing we got ... to Cali about ... health center a research studies that will come out on taxes for the next few months ... those are all geared towards answering questions like ... what does specifically supervision work for Brent what impacts is assessing how people long-term terms of ... committing war crimes trading so ... those are the kind of questions as a society we have to be asking rate would be safer ... aam and how clean the safer ... so ... here it in the education ladder and some backlash to the teacher didn't not everybody's lot it's ... right yet won twenty up stunts on ... some people ... might ... mistake summon ... the unions have ... not been great and so what the Arnold's some has some things done on pension reform and ... am not ... you know holding teachers accountable this is the way the on off button ... aam ... but I think one of things that Tom ... and with common touch that was too important to know this ... is the risk factor here and all Cynthia made it clear that ... they think ... that their purchase as a high risk high reward ... venture ... and so they wanna take chances ... not knowing if they're going to war and that's ok ... and so a lot of these initiatives as you said are spending millions of dollars ... some of them I now work ... in pigtails and they're okay with that as the big big big thing is really important to take big chances ... with their plant began given their ... resources also